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Also for some NS&I accounts interest is tax free because technically they are lottery (although with a relatively predictable return for large savings). Mind,
by gpderetta 5y ago
Also for some NS&I accounts interest is tax free because technically they are lottery (although with a relatively predictable return for large savings).
Mind, the interest is currently so low that it doesn't really make much of a difference.
- tialaramex 5y agoThe rationale for Premium Bonds isn't really the tax it's the fact that people like gambling. It turned out that persuading Aunt Sally to buy the new baby £100 of investment that will earn interest and might be worth something when the baby goes to college is hard - whereas Aunt Sally is much more interested in buying the baby £100 of scratch-offs with a tiny chance it wins big but most likely it gets nothing. This is before scatch-offs were legal in the UK as they are now but NS&I tweaked the numbers to offer a product that is (from their point of view as a bank with many savers) just a bond, but from the individual saver's point of view works like a lottery. https://www.nsandi.com/products/premium-bonds https://www.nsandi.com/products/premium-bonds
- Closi 5y agoIt’s often the tax, my parents have premium bonds and cite the tax benefits as they have maxed their ISA.